A Game Of Two Halves As Equities Tumble To Risk Reality

Leveraging EUR strength (USD weakness) in the US-open-to-EU-close to ramp stocks to highs was rapidly followed by a collapse back to reality in US equities from EU-close-to-US-close. Just remarkable. Treasuries and FX markets were much less exuberant over the entire lack of news that drive the S&P up over 20 points from open to EU close and sure enough - helped by the obvious desperation of a 'failed' Yellen-threat - equities retraced it all; ending the day back near the recent lows. Stocks once again tested the bottom of Draghi's Dream and rejected it; commodities were mixed and very dispersed with Copper and Silver swinging wildly (up on the day) even as the USD ended the day practically unchanged. Tech and financials are the losers still on the week as AAPL clawed its way back to marginally green by the close with the magical $545 level now critical four days in a row.

Remarkably, equities exuberantly accelerated away from reality to the European close and then gave it all back to close in line with risk-asset-reality...

A game of two halves indeed for today - separated perfectly by the correlation between EUR strength in the EU hours (repatriation flows) correlated with risk-on which suckers stop-runs in equities... then fades as the real sellers of strength on earnings and fiscal cliff realities take over...

Whats most interesting is that USD is also being faded so it seems. SPX gave it all back today but EUR AUD NOK even CAD.. not so much. rather much higher than they were before we got the equity and FX spike

Also DAX is outperforming SPX by a wide margin now YTD.

I think this is slowly becoming a big deal, RBA interest rates are at 3.25% and "the market" finally seems to be paying attention to this fact.

DXY is in a rising wedge and looks topish. i say down tomo.

NZD AUD still above breakouts. NOK rangebound to flat and the EURUSD isnt really moving, it is sort of confirming the market term "priced in" horrible ZEW didnt do much today.

US is in trouble across the board basically. im thinking a short SPX and short USD (via FX and PMs) trade could work on both fronts

The market is hedged on DXY strength and scalping equities (mainly HFTs) on the MA's, selling into the close. The FX yielders are safe havens only because bizarrely the iron ore spot price rose whilst China iron ore imports have collapsed and the USD is bid. Overall it looks primed for a major sell off, Yellen's jawbone three months ago would have given us a 60+ rise n the Dow, it went the other way.

So, you would be better at buying USD and selling equities on rallies etc. For all the bears waiting patiently to short this beast, just the timing...damn f*cking timing.

So as long as the CBs, who print fiat hand over fist, can continue to do so to purchase the bonds issued by the Treasuries of the Nation-States, then the ponzi will go on? What happens when counter parties decide to pull out of the scheme, as China and Russia have done via the UST issuance? Then each of the CBs buy their Treasury debt as the sole buyer.

But then the confedence of the sheel game is gone. And when the con game is gone, nothing is left. And when nothing is left, with a ponzi that is backed by nothing, then the game is over.

IMO we are in stage 1. That's when the stock market drops dead. Step 2 is when gold breaks free from all this bullshit and runs over 2k like it's nothing. Stage 3 is when someone...China or someone big starts dumping treasuries out in the open. The fed comes running in and buying them and gold goes parabolic. That is the end game. Paper fails at that point.

If that's true and this is what it looks like after stage 3 I am buying the dip. They have held gold in check and propped stocks up (until now) with the illusion that they still can somehow undo this mess. They have not had bullshit called on them yet. Not yet.

The Market "tumbled," because there's another Auction tomorrow, and the Ninnies just can't summon up the cojones to stop acting by Rote, even when it is so dangerous to be cowardly right now.

ALL PPT's - everybody's PPTs - just need to let Gold, Silver, and Brent escalate for an entire day without impediment - even actively boost them themselves.

Intervene to keep Euro at least flat, try to goose the Loonie and the Rupee and maybe the Nordics and the Peso.

In other words, keep up all the leading indicators for Risk On for an entire session beginning-to-end, and I guarantee everything else will follow.

Otherwise, the "Vigilantes" and the HFTs and outright Organized Crime groups now following them around the Market will squeeze every last drop out of every last day, hoping to precipitate a Flash Crash, their Nirvana.

This "market" is total BULLSHIT ! It's like watching Terminator 8, the last of the machines battling each other to rape the last human corpse.

Stock Markets- Rigged more ways than Obumma has free phones and govt cheese...

Commodities Markets- Rigged so bad even the mob is envious ....
Oh, and a nice shout out to Mr Dimon and all my friends at JPM - thanks for putting Silver on sale again today, I appreciate the opportunity yet again to keep my stacks growing at an even cheaper price